One night: the new car is not a fire, but a bubble.

category:Finance
 One night: the new car is not a fire, but a bubble.


This seems to confirm the concern about the bubble of the market value of new car manufacturers. Short agency citron recently released a report saying that Weilais share price was seriously overvalued, only worth $25. However, the subsequent plot did not develop in the direction of citrons prediction. After a short fall, Weilais share price returned to the track of soaring. The story of speculators becoming rich overnight is not always staged, and optimism is still spreading.

Musk and he Xiaopeng source: Internet

I hope that students should focus on their own career, not just on the short-term rise and fall of stock prices. On November 27, he Xiaopeng reminded Xiaopengs employees in an email. A few days later, musk also warned in an email to employees that Tesla needed to focus on cost control and profit, or the stock would be crushed right away..

But has the sound of new car making been sounded? The new forces with manufacturing and cost advantages far less than the old players can defend the temporarily occupied value highland?

It is difficult for the traditional valuation model to explain the stock price changes of new power auto companies due to the irrational rise and fall away from the fundamentals. In other words, if traditional valuation methods are used to assess new ventures, there may be a lot of bubbles.

In November, although the delivery volume of new force automobile enterprises reached a new high, Weilai, ideality and Xiaopeng combined were less than 15000, far less than the monthly sales of single models of most traditional automobile enterprises. But the market value of these new car companies is much higher than that of most traditional listed auto companies. These young players have been ranked among the top 15 auto companies in the world in only 5 or 6 years.

In the case of loss ratio per share of these companies, it is obvious that the loss ratio per share of these companies will not even be in the state of loss per share.

The market sales ratio (the ratio of the total market value to the main business income) can also show that the market value of these automobile enterprises deviates from the normal baseline. This data is mainly used for gem enterprises or high-tech enterprises. Generally speaking, the lower the market rate, the greater the investment value of its stock. But now the sales rate of Weilai is about 35 times, that of ideal car is 28 times, and that of Xiaopeng automobile is 70 times that of exaggeration. In contrast to the traditional car enterprise camp, Toyota is 0.76 times, GM is 0.27 times, BYD is 3.33 times.

This means that the profitability of new force automobile enterprises is far from reaching the standard of traditional giants, but the market value is approaching or even surpassing the latter at a high speed. In the capital market, the high market value of new power auto companies is mostly supported by investors optimism about their future development potential. This also gives rise to the saying valuation is ahead of time..

Zhang Ying, the founding managing partner of Jingwei China, recently wrote that in the era of low interest rates, investors are forced to pursue limited high-quality targets, and the markets judgment on the companys value is very exaggerated. Originally, a company may need six years to establish a complete business cycle, but now the judgment of the whole market is more advanced, and the market may act earlier. When the company develops to the third year, based on the expectation, it has reached the valuation level in the sixth year.

New energy vehicles have become the established development direction. Electrification and intelligent wave are superimposed. The traditional automobile industry which has not changed for a century is experiencing unprecedented impact. With Teslas birth as a clarion call, new domestic power car companies are also rushing forward, becoming a fierce afterwave to break the deadlock and promote change.

Smell the signal of domestic independent car companies, naturally not willing to miss the opportunity. Dongfeng launched Lan Tu, BAIC built the extreme fox arcfox, SAIC joined hands with ALI Luozi Zhiji automobile, and Changan also brought Huawei and Ningde times into the high-end new energy battlefield.

However, a basic fact is that the overall market share of new energy vehicles is still less than 5%. According to the development logic of Internet companies, even Microsoft, Alibaba, Tencent and other IT giants also need to determine their advantages based on the nearly monopolized user size and growth rate. For the current new energy vehicles, it is obvious that large-scale expansion cannot be completed immediately.

A new war situation has begun. Who will head high and leave the field?

Source of market value measurement of new car making forces: Guoxin Securities

Able to withstand heavy battering, the bubble is constantly defined. But the irrefutable truth is that the more bubbles are accumulated, the more likely they will be destroyed.

In the 17th century, tulip was introduced into Western Europe from Turkey. Because of its small quantity and high price, tulip was regarded as a symbol of wealth and glory by the upper class, which directly contributed to the upsurge of tulip trading. Some people are willing to go broke to buy a tulip, because they believe that someone will always pay a higher price for it.

When everyone was immersed in this tulip mania, a collapse came quietly. As a result of the sudden sell-off of sellers, the public began to panic, which led to the sudden collapse of the tulip market on February 4, 1637, and the average price fell by 90% in a week. Finally, this fever turned into the earliest economic bubble in human history, and the status of Hollands economic empire collapsed.

History is always surprisingly similar. At the end of the 1990s, the United States set off an investment boom led by the Internet industry. During this period, the price earnings ratio of NASDAQ reached 200 times. At that time, any stock with . Com in its name was scrambled by investors. In 2000, the United States entered the interest rate raising cycle, and a large number of funds withdrew, and Internet companies began to fall into the altar. The Internet bubble flower briefly as the broad-leaved epiphyllum at the turn of the century.

The policy of spring breeze overlay the market is good, so that the new energy automobile enterprises begin to rush ahead, but with the lessons of the bubble economy, the relevant state departments have begun to intervene in order to avoid the development sequelae of overcapacity. A new energy vehicle cooling war has quietly started.

Source: pixabay

In late November, a notice issued by the Industrial Development Department of the national development and Reform Commission on the investigation of new energy vehicle production and projects became the focus of public opinion. The circular pointed out that in response to the requirements of the general office of the State Council on strengthening the supervision during and after the event, consolidating the local main responsibility, and curbing the chaos such as blindly embarking on new energy vehicle manufacturing projects in Malaysia, a series of new energy vehicle investment projects will be carried out.

Among them, Evergrande, Baoneng and other enterprises are named in the notice, and it is required to report in detail the situation of automobile vehicle and parts projects (including approved and filed projects that have been approved and put on record and have not yet started construction) that have been invested and constructed locally since 2017, including land occupation, construction content, project progress, completed investment, etc. Affected by this, Evergrandes share price once fell 10% on the same day.

On November 2, the general office of the State Council issued the new energy vehicle industry development plan (2021-2035). Compared with the draft for comments issued by the Ministry of industry and information technology on December 3 last year, the plan has made many changes in the development vision and objectives, charging and exchanging electricity, hydrogen fuel, smart cars, power batteries, etc. the most significant change is that the proportion of new energy vehicles in the sales volume of new vehicles will be reduced from 25% to 20% in 2025, which will pour cold water for the hot new energy vehicle market.

Citron has published more than 150 short reports, and this move also triggered a temporary collapse in the share prices of three U.S. new car makers. On November 30, HINDENBERG research, a short selling agency, issued a short selling report against China capital stock Kangdi automobile industry, which was listed in the United States. It pointed out that Kangdi automobile industry used undisclosed affiliated companies to conduct false sales to falsify income and defraud government subsidies. Affected by this, the stock price of conti auto industry plummeted by 28.3% on November 30. Before trading on December 1, the companys share price continued to fall by more than 5%.

The bigger threat comes from inside the new cars. Up to now, the three giants of the new force auto enterprises have not achieved profits. If they want to support the huge market value, it is obviously necessary to take the rising sales volume and positive cash flow as the basis. Although Tesla has achieved five consecutive quarters of profits, the profit is almost negligible compared with the traditional giant, and relies heavily on the sale of carbon points.

In the face of Teslas soaring share price, musk is also worried. In terms of our actual profitability, the profit margin in the past year was very low. If we cant focus on cost control and profit, Teslas stock will be crushed like a sledgehammer hitting shufulei.

In the foreseeable future, the stock of new energy vehicles will also be the darling of capital, and bubbles will not be avoided. No one knows where the first dominoes will fall, but before that, how to maximize profits in the limited bubble expansion period becomes important.

Smart players adapt to the rules of the game, will use the rules to consolidate their city.

On December 2, ideal automobile announced that it plans to issue 47 million additional American Depository shares (ads), which, based on the current stock price, may raise about $1.6 billion. If the Underwriters exercise the over allotment option, the figure will exceed $1.8 billion. With $1.47 billion in initial public offerings and simultaneous private placements, the ideal auto has raised more than $3 billion in a matter of months.

Source: ideal official website

When the cost and market advantages are inferior to the traditional automobile enterprises, continuous expansion is still a must for new forces, so lack of money has become the norm. Since landing in the U.S. stock market, the stock price of ideal automobile has been rising. At this time, we can strike while the iron is hot and choose to issue additional shares, which can reserve the cash flow needed for future R & D and market development.

At the end of August before this, Weilai automobile also issued a plan for additional share issuance, with a total of 1.7 billion US dollars, making it the largest additional issue in Chinas new energy electric vehicle industry. As early as February, Tesla issued 2.65 million additional Tesla shares. At that time, Teslas share price was in a state of crazy growth. After the issuance, Tesla raised 2.31 billion US dollars.

According to observers familiar with the way capital works, a company should raise money when it can, not when it needs to. At that time, Dan ives, an analyst at wedbush securities, confirmed Teslas decision to issue additional shares, saying that this is a wise strategic move to eliminate the fear of cash crunch..

The bubble of high-tech stocks is normal in the capital market, especially the revolutionary technology companies have always been complemented by bubbles. According to Lang Shijie, CEO of Teslin, Tesla is like apple 10 years ago, when many people thought that the latter had been seriously frothy, but no one could have imagined that apple now has a market value of over 2 trillion dollars.

Back to the automobile industry, as the recognized king of industry, even in the face of the baptism of electrification, it is still unable to get rid of the attributes of manufacturing and scale replication, which means that if we pay too much attention to capital operation and ignore the nature of industrial manufacturing, there may be a risk of collapse at any time.

For the new force car companies that are now being praised by the heavens, after enjoying the prosperity brought by the bubble, how to bubble and return to rational growth is the priority among priorities.

Source: future auto daily editor: Chen Hequn_ NB12679